Problem 23 4 Pharoah Company had the following information available at the end of 2017 PHAROAH COMPANY COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31, 2017 AND 2016 2017 2016 Cash $9,960 $4,010 Accounts receivable 20,490 13,010 Short term investments 22,220 29,840 Inventory 42,180 35,190 Prepaid rent 3,000 11,980 Prepaid insurance 2,120 90 Supplies 1,010 76 Land 125,820 174,980 Buildings 351,050 351,050 Accumulated depreciationbuildings (105,020 ) (87,320 ) Equipment 527,450 397,360 Accumulated depreciationequipment (130,070 ) (112,340 ) Patents 44,820 50,450 Total assets $915,030 $868,376 Accounts payable $22,060 $32,000 Income taxes payable 4,990 4,020 Salaries and wages payable 4,980 2,990 Short term notes payable 10,010 10,010 Long term notes payable 59,400 69,540 Bonds payable 401,400 401,400 Premium on bonds payable 22,510 22,766 Common stock 240,810 219,200 Paid in capital in excess of parcommon stock 25,100 17,480 Retained earnings 123,770 88,970 Total liabilities and stockholders equity $915,030 $868,376 PHAROAH COMPANY INCOME STATEMENT AND DIVIDEND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2017 Sales revenue $1,155,590 Cost of goods sold 741,170 414,420 Gross margin Operating expenses Selling expenses $79,350 Administrative expenses 155,590 Depreciation Amortization expense 41,060 Total operating expenses 276,000 Income from operations 138,420 Other revenues expenses Gain on sale of land 7,930 Gain on sale of short term investment 3,980 Dividend revenue 2,370 Interest expense (52,180 ) (37,900 ) Income before taxes 100,520 Income tax expense 39,560 Net income 60,960 Dividends to common stockholders (26,160 ) To retained earnings $34,800 Prepare a statement of cash flows for Pharoah Company using the direct method accompanied by a reconciliation schedule Assume the short term investments are debt securities, classified as available for sale (Show amounts in the investing and financing sections that decrease cash flow with either a sign e g 15,000 or in parenthesis e g (15,000) )

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Problem 23-4 Pharoah Company had the following information available at the end of 2017. PHAROAH COMPANY COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31, 2017 AND

Problem 23-4

Pharoah Company had the following information available at the end of 2017.

PHAROAHCOMPANY COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31, 2017 AND 2016
	2017		2016
Cash	$9,960		$4,010
Accounts receivable	20,490		13,010
Short-term investments	22,220		29,840
Inventory	42,180		35,190
Prepaid rent	3,000		11,980
Prepaid insurance	2,120		90
Supplies	1,010		76
Land	125,820		174,980
Buildings	351,050		351,050
Accumulated depreciationbuildings	(105,020	)	(87,320	)
Equipment	527,450		397,360
Accumulated depreciationequipment	(130,070	)	(112,340	)
Patents	44,820		50,450
Total assets	$915,030		$868,376

Accounts payable	$22,060		$32,000
Income taxes payable	4,990		4,020
Salaries and wages payable	4,980		2,990
Short-term notes payable	10,010		10,010
Long-term notes payable	59,400		69,540
Bonds payable	401,400		401,400
Premium on bonds payable	22,510		22,766
Common stock	240,810		219,200
Paid-in capital in excess of parcommon stock	25,100		17,480
Retained earnings	123,770		88,970
Total liabilities and stockholders equity	$915,030		$868,376

PHAROAH COMPANY INCOME STATEMENT AND DIVIDEND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2017
Sales revenue			$1,155,590
Cost of goods sold			741,170
			414,420

Gross margin
Operating expenses
Selling expenses	$79,350
Administrative expenses	155,590
Depreciation/Amortization expense	41,060
Total operating expenses			276,000
Income from operations			138,420
Other revenues/expenses
Gain on sale of land	7,930
Gain on sale of short-term investment	3,980
Dividend revenue	2,370
Interest expense	(52,180	)	(37,900	)
Income before taxes			100,520
Income tax expense			39,560
Net income			60,960
Dividends to common stockholders			(26,160	)
To retained earnings			$34,800

Prepare a statement of cash flows for Pharoah Company using the direct method accompanied by a reconciliation schedule. Assume the short-term investments are debt securities, classified as available-for-sale. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)